Washington Highlights: March 9,
2007
AAMC Signs Letter Outlining Physician Payment
Reform Proposal
Contents
Prior Issues
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The AAMC Feb. 28, along with 76 specialty societies, sent a sustainable
growth rate (SGR) letter
to the leadership of the Senate Committee on Finance, and the House
Committees on Ways and Means, and Energy and Commerce. The letter,
which also was sent to the Chairs and Ranking Members of the respective
health subcommittees, outlines "a proposal for modifying Medicare's
physician payment formula." The AAMC was part of an AMA-led
workgroup that developed the document.
The proposal recommends:
- repealing the SGR and gradually transitioning to a new payment
system;
- developing initiatives to assure the "appropriateness"
of physician services;
- re-evaluating and refining the 2007 voluntary Medicare Physicians
Quality Reporting Initiative;
- and enacting additional reforms to "create incentives
for judicious use of services" and "adequately fund
the program."
The letter states that the recommendations "are the result
of extensive work by organizations representing a wide variety of
physician specialties." They reflect a "central premise"
that payment reforms "are best fostered through positive incentives
that inspire physicians...not by top-down spending targets"
that do not "distinguish between appropriate and inappropriate
care."
Information:
Christiane Mitchell, Director, Federal Affairs
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
Senators Express Opposition to Medicare and Medicaid
Hospital Cuts
Senators Blanche Lincoln (D-Ark.) and Pat Roberts (R-Kan.) March
1 sent a letter
with 39 other Senators to Senate Budget Committee leaders urging
them to reject cuts to Medicare and Medicaid hospital funding in
the FY 2008 budget resolution.
The letter detailed hospitals' growing cost pressures and negative
Medicare margins, stating, "We hope you will agree with MedPAC
and both include an inflation update for hospitals, and refrain
from recommending any cuts in hospital spending in Medicare or Medicaid,
which has even lower operating margins."
Also signing the letter were Senators Daniel Akaka (D-Hawaii),
Joe Biden (D-Del.), Jeff Bingaman (D-N.M.), Barbara Boxer (D-Calif.),
Robert Byrd (D-W.Va.), Maria Cantwell (D-Wash.), Bob Casey (D-Pa.),
Saxby Chambliss (R-Ga.), Hilary Rodham Clinton (D-N.Y.), Thad Cochran
(R-Miss.), Susan Collins (R-Maine), Chris Dodd (D-Conn.), Byron
Dorgan (D-N.D.), Richard Durbin (D-Ill.), Dianne Feinstein (D-Calif.),
Russ Feingold (D-Wisc.), Tom Harkin (D-Iowa), Johnny Isakson (R-Ga.),
Amy Klobuchar (D-Minn.), Edward Kennedy (D-Mass.), John Kerry (D-Mass.),
Herb Kohl (D-Wisc.), Frank Lautenberg (D-N.J.), Patrick Leahy (D-Vt.),
Carl Levin (D-Mich.), Joe Lieberman (D-Conn.), Robert Menendez (D-N.J.),
Barbara Mikulski (D-Md.), Ben Nelson (D-Neb.), Barack Obama (D-Ill.),
Mark Pryor (D-Ark.), Jack Reed (D-R.I.), Ken Salazar (D-Colo.),
Charles Schumer (D-N.Y.), Gordon Smith (R-Ore.), Olympia Snowe (D-Maine),
Arlen Specter (R-Pa.), Debbie Stabenow (D-Mich.), and John Warner
(R-Va.) signed the letter.
The letter was sent in anticipation of the committee marking up
its FY 2008 budget resolution shortly.
Information:
AAMC Government Relations
House and Senate Hearings Focus on SGR Reform
The Senate Finance Committee March
1, the House Ways and Means Health Subcommittee March
6, and House Energy and Commerce Health Subcommittee March
6 held hearings focusing on Medicare Payment Advisory Commission
(MedPAC) recommendations for reforming Medicare's Sustainable Growth
Rate (SGR) for physician payment. Witnesses included MedPAC Chair
Glenn Hackbarth, J.D., Government Accountability Office (GAO) Health
Care Director Bruce Steinwald, and Congressional Budget Office (CBO)
Director Peter Orszag, Ph.D.
Chairman Hackbarth testified that "Significant disagreement
exists within [MedPAC] about the utility of expenditure targets."
He added that "the complexity of the issues makes it difficult
to recommend any option with confidence." However, the commission
unanimously agrees that any payment reforms must "change the
inherent incentives in the fee-for-service system to reward quality
and efficient use of resources while improving payment equity."
He offered examples of such changes: performance-based payments;
improved "payment accuracy"; improving payment equity
among regions and specialties; incentives to coordinate care; using
comparative-effectiveness information; and bundling payments.
In his testimony before the Finance Committee, Dr. Orszag identified
"four dimensions" of physician payment reform: promoting
efficiency; encouraging "fiscal discipline in policymaking";
assuring "equity among regions and providers"; and minimizing/offsetting
the cost of altering the system. Dr. Orszag's testimony also included
cost estimates for short- and long-term SGR reform options. The
costs ranged from $4.2 billion (over 10 years) for a 1-year freeze
to $330.5 billion (over 10 years) to replace the SGR with an inflation-based
update. Dr. Orszag stated that "significant" cuts in physician
payment rates could potentially reduce the number of participating
providers, reduce quality, and/or trigger over-utilization of certain
services.
Appearing before the Energy and Commerce Health Subcommittee, Steinwald
testified that "physician profiling" (comparing a physician's
performance to an "efficiency standard") could be an important
part of SGR reform. According to Steinwald, the Centers for Medicare
and Medicaid Services (CMS) could use medical claims information
to "identify physicians who are likely to practice medicine
inefficiently."
During the Ways and Means Health Subcommittee hearing, Chairman
Pete Stark (D-Calif.) expressed support for the collection and analysis
of comparative effectiveness data. Chairman Stark proposed the development
of a health information technology network to collect such data,
as well as the development of medical school curricula that reflects
newly identified best practices. Also during the Ways and Means
hearing, Reps. Mike Thompson (D-Calif.) and Earl Pomeroy (D-N.D.)
voiced concern that the Medicare payment system discouraged primary
care physicians from practicing in rural areas. They and others
also argued for increased payments to primary care physicians (to
encourage growth in the specialty), as well as bonus payments for
physicians who manage patients with chronic illnesses.
Information:
Christiane Mitchell, Director, Federal Affairs
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
AAMC Joins Leading Research Universities in Licensing
Guidelines
The AAMC March 7, joined by the nation's top research universities,
released a white
paper that outlines principles and good practices in licensing
university intellectual property. The white paper, entitled "In
the Public Interest: Nine Points to Consider in Licensing University
Technology," aims to promote technology transfer while protecting
academic research and institutions and preserving traditional norms
of scientific collaboration and openness. A key point is that researchers
at universities across the country should be able to continue to
work with intellectual property that has been licensed to commercial
concerns.
The paper grew out of a meeting organized by and held at Stanford
in July 2006, which brought together research officers and technology
licensing directors and was attended by David Korn, M.D., AAMC Senior
Vice President for Biomedical and Health Sciences Research. In addition
to Stanford and the AAMC, the white paper is signed by the California
Institute of Technology, Cornell University, Harvard University,
Massachusetts Institute of Technology, University of California
system, Chicago and Urbana-Champaign campuses of the University
of Illinois, University of Santa Clara, University of Washington,
the Wisconsin Alumni Research Foundation, and Yale University.
Information:
Stephen Heinig, Lead Science Policy Analyst
AAMC Biomedical Health Sciences Research
sheinig@aamc.org
(202) 828-0488
AAMC Comments on FDA Regulation of Genetic Tests
The AAMC March 5 commented
on the Food and Drug Administration's (FDA) Draft Guidance for Industry,
Clinical Laboratories, and FDA Staff on In Vitro Diagnostic Multivariate
Index Assays (IVDMIAs). IVDMIAs are test systems that employ data
from in vitro laboratory tests and algorithms to generate results
that are used to diagnose a disease or condition or to help determine
what treatment course to pursue. Most gene-based diagnostic or predictive
tests are classified as IVDMIAs.
The FDA has previously not regulated such test systems but now
intends to regulate them as devices. AAMC expressed support for
the overall goal of the proposed guidance, namely to insure that
IVDMIAs are commercially available to physicians and the public
and are safe, technically accurate, and clinically valid. However,
AAMC expressed concern that regulation of these tests not result
in a burdensome and inefficient process that would discourage investment
or hinder academic and commercial research. Additionally, the letter
stated the importance of not slowing the development of tests that
would be useful in the prediction, diagnosis and treatment of disease.
Information:
Howard Dickler, Director
AAMC Biomedical Health Sciences Research
hdickler@aamc.org
(202) 828-0567
CMS Updates PPAC on Pay-for-Reporting Program
At the March 5 Practicing Physicians Advisory Council (PPAC) meeting,
Centers for Medicare and Medicaid Services (CMS) staff presented
a summary of the Physician Quality Reporting Initiative (PQRI) <www.cms.hhs.gov/PQRI
>. The pay-for-reporting program, which was authorized by the
Tax Relief and Health Care Act of 2006 (P.L.
109-432), pays a bonus to Medicare providers who report on quality
measures through administrative claims data.
Providers who participate in the PQRI are eligible to receive up
a maximum 1.5 percent bonus on their total allowed Medicare fee-for-service
charges from July 1 through Dec. 31. A payment cap may apply to
providers who report relatively few measures. The payment cap calculation
will be a function of the number of reported instances and a national
average "per measure" payment amount that CMS will calculate.
CMS has identified 74 measures that may be reported. To qualify
for the bonus, physicians reporting on fewer than 3 metrics must
report at least 80 percent of the time for all 3 measures. For practitioners
reporting more than 3 measures, at least 3 measures need to be reported
80 percent of the time. CMS will calculate reporting rates at the
individual practitioner level. For 2007, data will be captured through
administrative claims data, using special codes (called "G"
or "F" codes) to report patient information. CMS will
consider accepting information from patient registries and electronic
records starting in 2008. CMS plans to release confidential feedback
reports and deliver the bonus as a lump payment in 2008.
CMS also updated PPAC on expansion of the Recovery Audit Contractor
(RAC) program. In the RAC program, contractors are paid a contingency
fee for finding overpayments and underpayments. The RAC currently
operates in New York, Florida, and California, but will be expanded
nationwide no later than 2010.
CMS also provided a status on the national provider identifier
(NPI) implementation. All providers are required to be using NPIs
by May 23. According to CMS, approximately 82 percent of providers
have an NPI and approximately 13 percent of Medicare claims are
submitted with an NPI.
Other items discussed include: updates on Physicians Regulatory
Issues Team (PRIT) activities; the price transparency initiative
and hospital conditions of participation.
Information:
Denise Dodero, Sr. Director, Health Care Affairs
AAMC Health Care Affairs
ddodero@aamc.org
(202) 828-0493
Mary Patton, Senior Specialist
AAMC Health Care Affairs
mpatton@aamc.org
(202) 862-6297
IRS Issues Draft Good Governance Practices for
Charitable Organizations
The Internal Revenue Service (IRS) has issued a preliminary staff
discussion draft
of possible good governance practices for 501(c)(3) charitable organizations.
In the introduction to the document, the IRS states that "we
believe that an organization that adopts some or all of these practices
is more likely to be successful in pursing its exempt purposes and
earning public support."
Among the topics discussed in the IRS document are:
- the need for a clearly articulated mission statement;
- adopting and regularly evaluating a code of ethics and whistleblower
policies;
- due diligence by the directors and their duty of loyalty;
- transparency regarding the organization's mission, activities,
and finances;
- policies to ensure that fundraising solicitations meet federal
and state law requirements;
- ensuring that the board regularly receives and reads up-to-date
financial statements, auditor's letters, and finance and audit
committee reports;
- payment of reasonable compensation for services of officers
and staff; and
- adoption of a policy that establishes standards for document
integrity, retention, and destruction.
Information:
Ivy Baer, Director & Regulatory Counsel
AAMC Health Care Affairs
ibaer@aamc.org
(202) 828-0490
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